U.S. SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C.

                                   FORM 10-QSB

      X            QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
   -------          OF THE SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2003

                                       OR

              TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
   -------
                       THE SECURITIES EXCHANGE ACT OF 1934

                        FDIC Certificate Number: 26588-8


                       DARLINGTON COUNTY BANCSHARES, INC.
        (Exact name of small business issuer as specified in its charter)

              South Carolina                          57-0805621
      (State or other jurisdiction                  (I.R.S. Employer
   of incorporation or organization)               Identification No.)

                                202 CASHUA STREET
                        DARLINGTON, SOUTH CAROLINA 29532
                         (Address of principal executive
                          offices, including zip code)

                                 (843) 656-5000
                (Issuer's telephone number, including area code)
                ------------------------------------------------

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days.

                                YES  X    NO
                                    ---

State the number of shares outstanding of each of the issuer's classes of common
stock as of the latest practicable date.

     158,000 SHARES OF COMMON STOCK, $0.01 PAR VALUE, AS OF OCTOBER 31, 2003

   Transitional Small Business Disclosure Format (check one): Yes [ ] No [ X ]




<PAGE>

<TABLE>
<CAPTION>

                       DARLINGTON COUNTY BANCSHARES, INC.


                                      INDEX


PART I. - FINANCIAL INFORMATION                                                                                    PAGE NO.
-------------------------------                                                                                    --------

Item 1.  Financial Statements (Unaudited)

<S>                                                                                                                    <C>
         Condensed Consolidated Balance Sheets - September 30, 2003 and December 31, 2002.................................3

         Condensed Consolidated Statements of Operations -
           Nine months ended September 30, 2003 and 2002 and three months ended September 30, 2003 and 2002...............4

         Condensed Consolidated Statements of Changes in Shareholders' Equity and Comprehensive Income -
           Nine months ended September 30, 2003 and 2002..................................................................5

         Condensed Consolidated Statements of Cash Flows - Nine months ended September 30, 2003 and 2002..................6

         Notes to Condensed Consolidated Financial Statements.............................................................7

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations..........................8-13

Item 3.  Controls and Procedures.........................................................................................13

PART II. - OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K................................................................................14

         (a)  Exhibits...................................................................................................14

         (b)  Reports....................................................................................................14

</TABLE>



<PAGE>
<TABLE>
<CAPTION>

                       DARLINGTON COUNTY BANCSHARES, INC.

                          CONSOLIDATED BALANCE SHEETS

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS
                                                                                           SEPTEMBER 30,       DECEMBER 31,
                                                                                               2003               2002
                                                                                          --------------      -------------
(Dollars in thousands)                                                                      (UNAUDITED)
ASSETS
<S>                                                                                       <C>                 <C>
Cash and cash equivalents:
   Cash and due from banks                                                                $        1,386      $       1,144
   Federal funds sold                                                                              4,805              2,386
                                                                                          --------------      -------------
     Total cash and cash equivalents                                                               6,191              3,530
                                                                                          --------------      -------------
Securities available-for-sale                                                                      8,350              5,905
Securities held-to-maturity                                                                           86                641
Nonmarketable equity securities                                                                       50                 50
                                                                                          --------------      -------------
     Total investment securities                                                                   8,486              6,596
                                                                                          --------------      -------------
Loans                                                                                             20,656             19,015
Less allowance for loan losses                                                                       196                206
                                                                                          --------------      -------------
     Loans, net                                                                                   20,460             18,809
Premises and equipment, net                                                                          959              1,003
Accrued interest receivable                                                                          243                282
Other assets                                                                                          92                 47
                                                                                          --------------      -------------
     Total assets                                                                         $       36,431      $      30,267
                                                                                          ==============      =============
LIABILITIES
Deposits
   Demand                                                                                 $        5,345      $       4,607
   Savings and NOW                                                                                21,114             15,252
   Other time deposits                                                                             6,052              6,345
                                                                                          --------------      -------------
     Total deposits                                                                               32,511             26,204
Accrued interest payable                                                                              25                 29
Other liabilities                                                                                     97                 87
                                                                                          --------------      -------------
     Total Liabilities                                                                            32,633             26,320
STOCKHOLDERS' EQUITY
Common stock, $.01 par value, 1,000,000 shares authorized, 158,000 shares issued
   and outstanding at September 30, 2003
   and December 31, 2002                                                                               2                  2
Capital in excess of par value of stock                                                            1,618              1,618
Retained earnings                                                                                  2,290              2,260
Accumulated other comprehensive income (loss)                                                       (112)                67
                                                                                          --------------      -------------
     Total stockholders' equity                                                                    3,798              3,947
                                                                                          --------------      -------------
     Total liabilities and stockholders' equity                                           $       36,431      $      30,267
                                                                                          ==============      =============

                                   See notes to consolidated financial statements.

</TABLE>

                                       3
<PAGE>
<TABLE>
<CAPTION>

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


                                                                        NINE MONTHS ENDED             THREE MONTHS ENDED
(Dollars in thousands)                                                      SEPTEMBER 30,                  SEPTEMBER 30,
                                                                --------------------------     --------------------------
                                                                   2003           2002            2003           2002
                                                                -----------     ----------     -----------    -----------
INTEREST INCOME:
<S>                                                             <C>             <C>            <C>            <C>
   Loans, including fees                                        $     1,090     $    1,055     $       377    $       363
   Investment securities:
     Taxable                                                            184            272              63             78
     Nontaxable                                                          20             22               7              7
     Nonmarketable equity securities                                     -               1              -              -
   Federal funds sold                                                    27             22               7              6
                                                                -----------     ----------     -----------    -----------
       Total interest income                                          1,321          1,372             454            454
                                                                -----------     ----------     -----------    -----------
INTEREST EXPENSE:
   Deposits                                                             284            361              98            110
                                                                -----------     ----------     -----------    -----------
       Total interest expense                                           284            361              98            110
                                                                -----------     ----------     -----------    -----------
NET INTEREST INCOME                                                   1,037          1,011             356            344
Provision for loan losses                                                72             52              30             18
                                                                -----------     ----------     -----------    -----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                     965            959             326            326
                                                                -----------     ----------     -----------    -----------
NONINTEREST INCOME:
   Service charges on deposit accounts                                  240            268              78             94
   Gains on sales of securities available-for-sale                       20             -               -              -
   Other service charges, commissions and fees                           17             20               6             12
                                                                -----------     ----------     -----------    -----------
       Total                                                            277            288              84            106
                                                                -----------     ----------     -----------    -----------
NONINTEREST EXPENSES:
   Salaries and employee benefits                                       539            486             183            165
   Net occupancy expense                                                 62             55              21             19
   Furniture and equipment expense                                       83             62              29             22
   Other operating expenses                                             276            314              94             92
                                                                -----------     ----------     -----------    -----------
       Total                                                            960            917             327            298
                                                                -----------     ----------     -----------    -----------
INCOME BEFORE INCOME TAXES                                              282            330              83            134
Income tax provision                                                     94            109              29             37
                                                                -----------     ----------     -----------    -----------
NET INCOME                                                      $       188     $      221     $        54    $        97
                                                                ===========     ==========     ===========    ===========
PER SHARE
AVERAGE SHARES OUTSTANDING                                          158,000        158,000         158,000        158,000
                                                                ===========     ==========     ===========    ===========
NET INCOME                                                      $      1.19     $     1.40     $      0.34    $      0.61
                                                                ===========     ==========     ===========    ===========
DIVIDENDS PAID                                                  $      1.00     $     1.00     $      1.00    $      1.00
                                                                ===========     ==========     ===========    ===========

</TABLE>

                                       4
<PAGE>

<TABLE>
<CAPTION>
                              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME
                                          FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                                              (UNAUDITED)

                                                                                                   ACCUMULATED
                                                                                                      OTHER
                                                                                                     COMPRE-
                                                   COMMON STOCK         ADDITIONAL                   HENSIVE
                                            -------------------------     PAID-IN     RETAINED       INCOME
(Dollars in thousands)                          SHARES        AMOUNT      CAPITAL     EARNINGS       (LOSS)        TOTAL
                                            -----------   -----------  -----------  -----------  -----------  -----------
<S>                                             <C>       <C>          <C>          <C>          <C>          <C>
BALANCE, DECEMBER 31, 2001                      158,000   $         2  $     1,618  $     2,096  $       (22) $     3,694

Net income for the period                                                                   221                       221

Comprehensive income, net of tax                                                                          95           95
                                                                                                              -----------

Comprehensive income                                                                                                  316
                                                                                                              -----------

Cash dividend ($1.00 per share)                                                            (158)                     (158)
                                            -----------   -----------  -----------  -----------  -----------  -----------

BALANCE, SEPTEMBER 30, 2002                     158,000   $         2  $     1,618  $     2,159  $        73  $     3,852
                                            ===========   ===========  ===========  ===========  ===========  ===========


BALANCE, DECEMBER 31, 2002                      158,000   $         2  $     1,618  $     2,260  $        67  $     3,947

Net income for the period                                                                   188                       188

Comprehensive income, net of tax                                                                        (179)        (179)
                                                                                                              -----------

Comprehensive income                                                                                                    9
                                                                                                              -----------

Cash dividend ($1.00 per share)                                                            (158)                     (158)
                                            -----------   -----------  -----------  -----------  -----------  -----------

BALANCE, SEPTEMBER 30, 2003                     158,000   $         2  $     1,618  $     2,290  $      (112) $     3,798
                                            ===========   ===========  ===========  ===========  ===========  ===========


</TABLE>

                                       5
<PAGE>
<TABLE>
<CAPTION>
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


                                                                                                 NINE MONTHS ENDED
                                                                                                   SEPTEMBER 30,
                                                                                        ---------------------------------
(Dollars in thousands)                                                                       2003                2002
                                                                                        -------------       -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                     <C>                 <C>
   Net income                                                                           $         188       $         221
   Adjustments to reconcile net income to net cash
      provided by operating activities:
       Depreciation                                                                                61                  53
       Provision for loan losses                                                                   72                  52
       Amortization less accretion on investments                                                  31                  -
       Gain on sales of securities available-for-sale                                             (16)                 -
       (Increase) decrease in other assets                                                       (103)                 54
       Increase (decrease) in other liabilities                                                    75                  90
                                                                                        -------------       -------------
         Net cash provided by operating activities                                                308                 470
                                                                                        -------------       -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   (Increase) decrease in federal funds sold                                                   (2,419)              2,146
   Proceeds from maturities of securities held-to-maturity                                        560                  77
   Proceeds from sales of investment securities available-for-sale                                835                  -
   Proceeds from calls and maturities of securities available-for-sale                          3,794                 894
   Purchase of investment securities available-for-sale                                        (7,245)             (3,602)
   Net increase in loans                                                                       (1,723)              1,502
   Purchase of equipment                                                                          (17)                 45
                                                                                        -------------       -------------
         Net cash provided (used) by investing activities                                      (6,215)              1,062
                                                                                        -------------       -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Net increase (decrease) in deposit accounts                                                  6,307                (778)
   Cash dividends paid                                                                           (158)               (158)
                                                                                        -------------       -------------
         Net cash provided (used) for financing activities                                      6,149                (936)
                                                                                        -------------       -------------
NET INCREASE IN CASH AND CASH EQUIVALENTS                                                         242                 596
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                                  1,144                 315
                                                                                        -------------       -------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                                $       1,386       $         911
                                                                                        =============       =============
CASH PAID FOR
   Interest                                                                             $         288       $         361
                                                                                        =============       =============
   Income taxes                                                                         $         113       $         109
                                                                                        =============       =============
</TABLE>

                                       6
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting  principles for interim financial information
and with the  instructions  to Form 10-QSB and Item 310(b) of Regulation  S-B of
the Securities  and Exchange  Commission.  Accordingly,  they do not include all
information and footnotes required by generally accepted  accounting  principles
for complete financial  statements.  However, in the opinion of management,  all
adjustments  (consisting of normal recurring  adjustments)  considered necessary
for a fair presentation have been included.

NOTE 2 - NET INCOME PER SHARE

Net income per share is computed on the basis of the weighted  average number of
common shares  outstanding in accordance with Statement of Financial  Accounting
Standards  No.  128,  "Earnings  per  Share."  The  Company  does  not  have any
instruments  which are dilutive;  therefore,  only basic net income per share of
common stock is presented.


















                                       7
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following  discussion and analysis  should be read in  conjunction  with the
financial  statements  and related notes  appearing in the 2002 Annual Report of
Darlington  County  Bancshares,  Inc.  Results of operations for the nine months
ending  September 30, 2003 are not  necessarily  indicative of the results to be
attained  for  any  other  period.   The  following   information   may  contain
forward-looking  statements that involve risks and uncertainties.  The Company's
actual  results  may  differ  materially  from  the  results  discussed  in  the
forward-looking statements.

This  report  contains   "forward-looking   statements"   relating  to,  without
limitation, future economic performance,  plans and objectives of management for
future  operations,  and  projections of revenues and other financial items that
are based on the beliefs of our management,  as well as assumptions  made by and
information   currently  available  to  our  management.   The  words  "expect,"
"estimate,"  "anticipate,"  and "believe," as well as similar  expressions,  are
intended to identify forward-looking  statements.  Our actual results may differ
materially from the results discussed in the forward-looking statements, and our
operating   performance   each   quarter  is   subject  to  various   risks  and
uncertainties.  The Private Securities  Litigation Reform Act of 1995 provides a
safe harbor for forward-looking statements. In order to comply with terms of the
safe  harbor,  the  Company  notes  that a variety of  factors  could  cause the
Company's   actual  results  and  experience  to  differ   materially  from  the
anticipated   results  or  other   expectations   expressed  in  the   Company's
forward-looking  statements.  The risks and  uncertainties  that may  affect the
operations,  performances,  development  and results of the  Company's  business
include,  but are not limited to, the following:  risks from changes in economic
and industry  conditions;  changes in interest  rates;  risks inherent in making
loans including  repayment  risks and value of collateral;  dependence on senior
management;  and recently-enacted or proposed legislation.  Statements contained
in this filing  regarding  the demand for the  Company's  products and services,
changing  economic  conditions,  interest rates,  consumer spending and numerous
other factors may be forward-looking statements and are subject to uncertainties
and risks.  When relying on  forward-looking  statements to make  decisions with
respect to the Company, investors and others are cautioned to consider these and
other risks and uncertainties.

Such  forward-looking  statements  speak  only  as of the  date  on  which  such
statements  are made. We undertake no  obligation to update any  forward-looking
statement  to  reflect  events or  circumstances  after  the date on which  such
statement  is made  to  reflect  the  occurrence  of  unanticipated  events.  In
addition,  certain  statements  in  future  filings  by  the  Company  with  the
Securities  and Exchange  Commission,  in press releases and in oral and written
statements  made by or with the approval of the Company which are not statements
of historical fact constitute forward-looking statements.

RESULTS OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 2003

The  Company's  net income for the nine  months  ended  September  30,  2003 was
$188,000  or $1.19 per share as  compared to $221,000 or $1.40 per share for the
nine months ended September 30, 2002.

NET INTEREST INCOME

Net interest  income is the  difference  between the interest  earned on earning
assets and the interest paid for funds  acquired to support  those  assets.  Net
interest income, the principal source of the Bank's earnings, was $1,037,000 and
$1,011,000 for the nine months ended September 30, 2003 and 2002,  respectively.
The increase was attributable to an increase in the volume of earning assets.

Changes that affect net  interest  income are changes in the average rate earned
on interest-earning assets, changes in the average rate paid on interest-bearing
liabilities,   and  changes  in  the  volume  of  interest-earning   assets  and
interest-bearing liabilities.

                                       8
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (continued)

Average  interest-earning assets during the nine months ended September 30, 2003
increased  by  1,826,919  or 6.45% over the same period in 2002,  while  average
interest-bearing liabilities increased by $1,440,056 or 6.52% comparing the nine
months of 2003 with the nine months of 2002.
<TABLE>
<CAPTION>

                                                                   AVERAGE BALANCES, INCOME AND EXPENSES, AND RATES
                                                                         NINE MONTHS ENDED SEPTEMBER 30, 2003
                                                              -----------------------------------------------------------
                                                                     AVERAGE               INCOME/            ANNUALIZED
                                                                     BALANCE               EXPENSE            YIELD/RATE
                                                              ---------------       ---------------        --------------
<S>                                                           <C>                   <C>                             <C>
   Federal funds sold                                         $     3,343,217       $        27,000                 1.08%
   Investment securities                                            7,248,599               204,000                 3.73%
   Loans                                                           19,557,982             1,090,000                 7.43%
                                                              ---------------       ---------------
     Total earning assets                                     $    30,149,798             1,321,000                 5.83%
                                                              ===============
     Total interest bearing liabilities                       $    23,541,398               284,000                 1.61%
                                                              ===============       ---------------       --------------
   Net interest spread                                                                                              4.22%
   Net interest income/margin                                                       $     1,037,000                 4.25%
                                                                                    ===============       ==============


                                                                   AVERAGE BALANCES, INCOME AND EXPENSES, AND RATES
                                                                          NINE MONTHS ENDED SEPTEMBER 30, 2002
                                                              -----------------------------------------------------------
                                                                     AVERAGE               INCOME/            ANNUALIZED
                                                                     BALANCE               EXPENSE            YIELD/RATE
                                                              ---------------       ---------------         -------------
   Federal funds sold                                         $     1,738,432       $        22,000                 1.69%
   Investment securities                                            8,590,285               295,000                 4.56%
   Loans                                                           17,994,162             1,055,000                 7.82%
                                                              ---------------       ---------------
     Total earning assets                                     $    28,322,879             1,372,000                 6.45%
                                                              ===============
     Total interest bearing liabilities                       $    22,101,342               361,000                 1.63%
                                                              ===============       ---------------       --------------
   Net interest spread                                                                                              4.82%
   Net interest income/margin                                                       $     1,011,000                 4.75%
                                                                                    ===============       ==============

</TABLE>

As  reflected  above,  for the nine months of 2003 the average  yield on earning
assets  amounts  amounted to 5.83%,  while the average cost of  interest-bearing
liabilities was 1.61%. For the same period of 2002, the average yield on earning
assets was 6.45% and the average cost of interest-bearing liabilities was 1.63%.
The decrease in the yield on earning assets is attributable to a decrease in the
yield on all interest  earning  assets.  The net interest  margin is computed by
subtracting  interest  expense from  interest  income and dividing the resulting
figure by  average  interest-earning  assets.  The net  interest  margin for the
period ended September 30, 2003 was, 4.25% and for 2002 was 4.75%.

NONINTEREST INCOME

Noninterest  income for the nine months  ended  September  30, 2003 and 2002 was
$277,000  and  $288,000,  respectively.  Service  charges  on  deposit  accounts
decreased  $28,000 or 10.45% to $240,000  when  comparing  the nine months ended
September 30, 2003 to 2002.  Other service  charges,  commissions  and fees also
decreased  $3,000 or 15.0% when  comparing  the nine months ended  September 30,
2003 to 2002.  These  decreases  were  offset  by  gains on sales of  securities
available for sale that totaled  $20,000 for the nine months ended September 30,
2003.  There were no gains on sales of  securities  during the nine months ended
September 30, 2002.

                                       9
<PAGE>



ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (continued)

NONINTEREST EXPENSES

Noninterest  expenses for the nine months ended  September 30, 2003 and 2002 was
$960,000 and  $917,000,  respectively.  Noninterest  expenses  increased  due to
increases in salaries  and  employee  benefits  expense,  occupancy  expense and
furniture and fixtures  expense net of a decrease in other  operating  expenses.
These increases were due to the normal growth of the Bank.

PROVISION FOR LOAN LOSSES

The  allowance  for loan  losses was 0.95% of loans,  as of  September  30, 2003
compared  to 1.08% at  December  31,  2002.  The  provision  for loan losses was
$72,000  and  $52,000 for the nine  months  ended  September  30, 2003 and 2002,
respectively.  Management  reviews the  adequacy of the  allowance on an ongoing
basis and believes the allowance is adequate.

Risks are  inherent  in making all loans,  including  risks with  respect to the
period of time over which loans may be repaid,  risks  resulting from changes in
economic  and industry  conditions,  risks  inherent in dealing with  individual
borrowers,  and, in the case of a  collateralized  loan,  risks  resulting  from
uncertainties about the future value of the collateral. We maintain an allowance
for loan  losses  based  on,  among  other  things,  historical  experience,  an
evaluation of economic conditions, and regular reviews of delinquencies and loan
portfolio  quality.  Our judgment  about the adequacy of the  allowance is based
upon a number  of  assumptions  about  future  events,  which we  believe  to be
reasonable,  but which may not prove to be accurate. Thus, charge-offs in future
periods could exceed the allowance for loan losses,  or  substantial  additional
increases in the allowance  for loan losses could be required.  Additions to the
allowance  for loan  losses  would  result in a decrease  of our net income and,
possibly,  our capital.  Based on present information,  we believe the allowance
for loan losses is adequate at September  30, 2003 to meet  presently  known and
inherent risks in the loan portfolio.

RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 2003

The  Company's net income for the third quarter of 2003 was $54,000 or $0.34 per
share compared to $97,000 or $0.61 per share for the third quarter of 2002.

NET INTEREST INCOME

Net interest  income is the  difference  between the interest  earned on earning
assets and the interest paid for funds  acquired to support  those  assets.  Net
interest income,  the principal source of the Bank's earnings,  was $356,000 and
$344,000 for the quarters ended September 30, 2003 and 2002, respectively.

NONINTEREST INCOME

Noninterest  income for the three months ended  September 30, 2003 and 2002 were
$84,000  and  $106,000,  respectively.  Noninterest  income  decreased  due to a
decrease  in service  charges on deposit  accounts  from  $94,000  for the three
months  ended  September  30,  2002 to $78,000 for the same period in 2003 and a
$6,000 decrease in other service charges, commissions and fees.

NONINTEREST EXPENSES

Noninterest expenses for the three months ended September 30, 2003 and 2002 were
$327,000 and  $298,000,  respectively.  Noninterest  expenses  increased  due to
increased salaries and employee benefits expense,  occupancy expense,  furniture
and fixtures expense and other operating  expenses.  These increases were due to
the normal growth of the Bank.

PROVISION FOR LOAN LOSSES

The provision for loan losses was $30,000 and $18,000 for the three months ended
September 30, 2003 and 2002,  respectively.  Management  increased its provision
during the quarter due to the declining economy.

                                       10
<PAGE>



ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (continued)

FINANCIAL CONDITION

LIQUIDITY

Liquidity  is the  ability  to  meet  current  and  future  obligations  through
liquidation or maturity of existing  assets or the  acquisition of  liabilities.
The Company manages both assets and liabilities to achieve appropriate levels of
liquidity.  Cash and short-term investments are the Company's primary sources of
asset liquidity.  These funds provide a cushion against short-term  fluctuations
in cash flow from both  deposits  and loans.  The  investment  portfolio  is the
Bank's principal source of secondary asset liquidity.  However, the availability
of this source of funds is influenced by market conditions.  Management believes
that the Company's  liquidity  sources are adequate to meet its operating needs.
However, we have approximately  $2,500,000 of unused lines of credit to purchase
federal funds should additional funding sources be needed.

OFF-BALANCE SHEET RISK

Through the  operations of our bank,  we have made  contractual  commitments  to
extend  credit  in  the  ordinary  course  of  our  business  activities.  These
commitments  are legally  binding  agreements  to lend money to our customers at
predetermined  interest  rates for a specified  period of time. At September 30,
2003, we had issued  commitments to extend credit of $4,446,000  through various
types of commercial  lending  arrangements.  We evaluate each customer's  credit
worthiness on a case-by-case basis. The amount of collateral obtained, if deemed
necessary by us upon extension of credit,  is based on our credit  evaluation of
the borrower. Collateral varies but may include accounts receivable,  inventory,
property, plant and equipment, commercial and residential real estate. We manage
the credit risk on these  commitments by subjecting them to normal  underwriting
and risk management processes.

INVESTMENT SECURITIES

Total investment securities increased $1,890,000 during the first nine months of
2003.  This increase was due to an increase in securities  available for sale of
$2,445,000,  net of a decrease in  securities  held-to-maturity  of $555,000.  A
portion  of  excess  funds  generated  from  deposit  growth  were  invested  in
securities available for sale.

LOANS

Loans  increased  slightly  during  the first  nine  months  of 2003.  Net loans
increased  $1,641,000,  or 8.63%,  during the period.  As shown below,  the main
components of growth in the loan  portfolio  were consumer and other loans which
increased  11.04%,  or $523,000,  and real  estate-construction  which increased
$531,000,  or 72.54%,  from  December 31, 2002 to September  30, 2003.  Balances
within the major  loans  receivable  categories  as of  September  30,  2003 and
December 31, 2002 are as follows:
<TABLE>
<CAPTION>

                                                                                    SEPTEMBER 30,          DECEMBER 31,
                                                                                            2003                  2002
                                                                                  ---------------       ---------------
<S>                                                                               <C>                   <C>
     Real estate - construction                                                   $     1,263,000       $       732,000
     Real estate - mortgage                                                             8,892,000             8,714,000
     Commercial and industrial                                                          4,227,000             3,797,000
     Agriculture                                                                        1,013,000             1,034,000
     Consumer and other                                                                 5,261,000             4,738,000
                                                                                  ---------------       ---------------
                                                                                  $    20,656,000       $    19,015,000
                                                                                  ===============       ===============
</TABLE>

                                       11
<PAGE>



ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (continued)

DEPOSITS

Total deposits  increased  $6,307,000 or 24.07% to $32,511,000  during the first
nine months of 2003.  The largest  increase was in money market  accounts  which
increased  $3,179,000  to  $9,403,000  at September  30, 2003. We offer a higher
interest rate on money market accounts than do our competitors.

CAPITAL RESOURCES

The capital  base for the Company  decreased  by $149,000  during the first nine
months of 2003. This net change includes an increase to equity for net income of
$188,000  offset by a decrease in unrealized  gains on investment  securities of
$179,000 and cash dividends paid of $158,000.

The Federal Deposit  Insurance  Corporation has issued guidelines for risk-based
capital  requirements.  As of September  30, 2003,  the Bank exceeds the capital
requirement levels that are to be maintained.
<TABLE>
<CAPTION>


                                                                            WELL CAPITALIZED      ADEQUATELY CAPITALIZED
                                                        ACTUAL                 REQUIREMENT              REQUIREMENT
                                               -----------------------   ----------------------    ---------------------
                                                  AMOUNT       RATIO        AMOUNT        RATIO      AMOUNT       RATIO
                                               -----------------------   ----------------------    ---------------------

<S>                                            <C>              <C>      <C>              <C>      <C>             <C>
  Total capital (to risk-weighted assets)      $   4,056        16.88%   $   2,403        10.00%   $    1,922      8.00%

  Tier 1 capital (to risk weighted assets)     $   3,860        16.06%   $   1,442         6.00%   $      961      4.00%

  Tier 1 capital (to average assets)           $   3,860        11.38%   $   1,696         5.00%   $    1,357      4.00%
</TABLE>

CRITICAL ACCOUNTING POLICIES

We have adopted  various  accounting  policies  which govern the  application of
accounting principles generally accepted in the United States in the preparation
of our financial statements.  Our significant  accounting policies are described
in the notes to the  consolidated  financial  statements at December 31, 2002 as
filed on our annual report on Form 10-KSB.  Certain accounting  policies involve
significant  judgments and assumptions by us which have a material impact on the
carrying value of certain assets and  liabilities.  We consider these accounting
policies to be critical  accounting  policies.  The judgments and assumptions we
use are based on the historical  experience and other factors,  which we believe
to be reasonable under the circumstances. Because of the nature of the judgments
and  assumptions we make,  actual results could differ from these  judgments and
estimates  which could have a major impact on our carrying  values of assets and
liabilities and our results of operations.

We believe the  allowance for loan losses is a critical  accounting  policy that
requires the most significant judgments and estimates used in preparation of our
consolidated  financial  statements.  Refer to the  portions  of our 2002 Annual
Report on Form 10-KSB and this Form 10-QSB that address our  allowance  for loan
losses for a description of our processes and  methodology  for  determining our
allowance  for loan  losses.  There  have  been no  significant  changes  in our
critical accounting policies since December 31, 2002.

EFFECTS OF REGULATORY ACTION

The  management  of the Company is not aware of any current  recommendations  by
regulatory  authorities,  which if they  were to be  implemented,  would  have a
material effect on liquidity, capital resources, or operations.

IMPACT OF INFLATION

Unlike  most  industrial  companies,  the assets and  liabilities  of  financial
institutions  such as the Bank are  primarily  monetary  in  nature.  Therefore,
interest rates have a more significant  impact on the Bank's performance than do
the effects of changes in the general rate of  inflation  and changes in prices.
In addition, interest rates do not necessarily move in the same magnitude as the
prices of goods and  services.  As  discussed  previously,  management  seeks to
manage the  relationships  between interest  sensitive assets and liabilities in
order to protect against wide rate fluctuations,  including those resulting from
inflation.

                                       12
<PAGE>



ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (continued)

RECENTLY ISSUED ACCOUNTING STANDARDS

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-based
Compensation  - Transition and  Disclosure",  an amendment of FASB Statement No.
123, "Accounting for Stock-Based  Compensation",  to provide alternative methods
of  transition  for a  voluntary  change  to the  fair  value  based  method  of
accounting for stock-based employee  compensation.  SFAS No. 148 also amends the
disclosure provisions of SFAS No. 123 and Accounting Pronouncement Board ("APB")
Opinion No. 28,  "Interim  Financial  Reporting",  to require  disclosure in the
summary  of  significant  accounting  policies  of the  effects  of an  entity's
accounting policy with respect to stock-based employee  compensation on reported
net income and  earnings per share in annual and interim  financial  statements.
While SFAS No. 148 does not amend SFAS No. 123 to require  companies  to account
for  employee  stock  options  using  the  fair  value  method,  the  disclosure
provisions  of SFAS No. 148 are  applicable to all  companies  with  stock-based
employee compensation,  regardless of whether they account for that compensation
using the fair value method of SFAS No. 123 or the intrinsic value method of APB
Opinion  No.  25.  The  provisions  of SFAS No.  148 are  effective  for  annual
financial  statements  for fiscal years ending after  December 15, 2003, and for
financial reports containing  condensed financial  statements for interim period
beginning after December 15, 2002. We have adopted the disclosure  provisions of
SFAS No.  148,  which had no  impact on our  financial  condition  or  operating
results.

In April 2003,  the FASB issued SFAS No. 149,  "Amendment  of  Statement  133 on
Derivative  Instruments  and  Hedging  Activities."  SFAS  No.  149  amends  and
clarifies  accounting for derivative  instruments,  including certain derivative
instruments  embedded in other contracts and loan commitments that relate to the
origination of mortgage loans held for sale,  and for hedging  activities  under
SFAS No. 133. SFAS No. 149 is generally  effective for contracts entered into or
modified after  September 30, 2003. The adoption of SFAS No. 149 will not have a
material impact on our financial condition or operating results.

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with  Characteristics  of both Liabilities and Equity." SFAS No. 150
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with  characteristics  of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some  circumstances).  Many of those  instruments
were previously  classified as equity.  SFAS No. 150 is generally  effective for
financial instruments entered into or modified after May 31, 2003, and otherwise
is effective at the beginning of the first interim period  beginning  after June
15,  2003.  The  adoption of SFAS No. 150 did not have a material  impact on our
financial condition or operating results.

In June 2003, the American  Institute of Certified  Public  Accountants  (AICPA)
issued an exposure draft of a proposed  Statement of Position (SOP),  "Allowance
for Credit  Losses." The proposed SOP addresses the  recognition and measurement
by creditors of the allowance for credit  losses  related to all loans,  as that
term is defined in SFAS No. 114,  "Accounting  by Creditors for  Impairment of a
Loan." The proposed SOP provides that the  allowance for credit losses  reported
on a  creditor's  balance  sheet  should  consist  only of (1) a  component  for
individual  loan impairment  recognized and measured  pursuant to FASB Statement
No. 114 and (2) one or more components of collective loan impairment  recognized
pursuant to FASB Statement No. 5, "Accounting for  Contingencies,"  and measured
in  accordance  with the guidance in the proposed  SOP.  The  provisions  of the
proposed  SOP would be  effective  for  financial  statements  for fiscal  years
beginning  after  December 15, 2003,  with earlier  application  permitted.  The
effect  of  initially  applying  the  provisions  of the  proposed  SOP would be
reported as a change in accounting estimate. Comments on the exposure draft were
due by September  19, 2003. We have not  determined  the effect on our financial
condition or operating results related to the adoption of this proposed SOP, but
such effect would most likely be material.


ITEM 3. CONTROLS AND PROCEDURES

Our management,  with the  participation of our chief executive  officer and our
chief  financial  officer,  has evaluated the  effectiveness  of our  disclosure
controls and  procedures  (as defined in 17 C.F.R.  Sections  240.13a-15(e)  and
240.15d-15(e))  as of September 30, 2003,  and,  based on such  evaluation,  our
chief executive officer and chief financial officer concluded that such controls
and procedures were effective as of September 30, 2003.

There  were no  significant  changes in our  internal  controls  over  financial
reporting that occurred  during the fiscal quarter ended September 30, 2003 that
have materially  affected,  or are reasonably likely to materially  affect,  our
internal controls over financial reporting.

                                       13
<PAGE>




PART II - OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORT ON FORM 8-K
<TABLE>
<CAPTION>

(a)  Exhibits

     <S>    <C>
     31.1   Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

     31.2   Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

     32.1   Certification Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

     32.2   Certification Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
</TABLE>

(b)  Reports  on 8-K - No reports on 8-K were  filed  during the  quarter  ended
September 30, 2003.


















                                       14
<PAGE>


                                    SIGNATURE

In accordance with the requirements of the Securities  Exchange Act of 1934, the
Bank has duly caused  this report to be signed on its behalf by the  undersigned
thereunto duly authorized.

<TABLE>

DARLINGTON COUNTY BANCSHARES, INC.
Name of Bank


<S>                                                                    <C>
By:  /s/W. B. McCown, III                                              Date: November 10, 2003
     ---------------------------------------------
     W. B. McCown, III, President and Chief Executive Officer


By:  /s/ Henry M. Funderburk                                           Date: November 10, 2003
     ---------------------------------------------
     Henry M. Funderburk
     Executive Vice President
     and Chief Financial Officer
</TABLE>















                                       15